Let’s take an informal poll. What’s your attitude toward “waste, fraud and abuse” in healthcare? You hate it? Good. It’s stealing? Absolutely. Devious, criminal and unpatriotic? Yup.
Now a final question: “Is it okay if the government does it?”
This is the question that arises from the case of Dr. Pam Svendsen and a patient whom we’ll call Mary. Dr. Svendsen’s practice is fairly typical of family practice offices in the U.S. these days. Many practices are struggling to make ends meet. Payment rates are low, especially for Medicare. For a medium-level visit that may take anywhere from 15 to 45 minutes, Medicare pays less than $60. That $60 has to pay for both the doctor’s salary, clinic staff and office overhead. Medicaid pays less than $20. Having a lot of Medicare and Medicaid patients in your practice virtually guarantees bankruptcy.
Dr. Svendsen has a lot of “TRICARE” patients in her practice. TRICARE is the Department of Defense’s insurance program for members of the uniformed services, their families and survivors. It pays only 90% of what Medicare pays, but she’s been reluctant to drop her patients with this insurance. For one thing, Pam is a veteran herself – having served in the Navy as a shipboard line officer for seven years before to going to medical school. For another, every doctor hates to turn away the patients and families that they’ve taken care of for years. That loyalty and affection that most doctors feel for their patients is a quality that many insurers – especially government-run plans such as Medicare, Medicaid and TRICARE – are happy to exploit. You see, none of these government-run health plans actually pay doctors or hospitals enough to cover the actual cost of the care they deliver. Providers survive only to the extent that payments from private health insurance are able to make up the difference. So government insurers are actually parasitizing doctors, hospitals, private insurance and the remainder of the healthcare financing system. But we’ll talk about this in more detail in another post.
Mary happens to be a TRICARE patient with a very strong family history of breast cancer. Both her mother and a sister have had it. They have a genetic trait that puts both them and Mary at high risk for developing additional breast cancers. Not long ago, Mary had a routine mammogram . It was normal, but because of her family history medical guidelines say that she should also have a breast MRI study as an additional screening measure.
MRIs are valuable, but expensive tests. Nearly all insurance companies insist that doctors formally ask for permission to order tests like this ahead of time. Having doctors (who know their patients and how to practice medicine) ask for prior authorization gives the insurance company employees (who almost certainly don’t know the patients or how to practice medicine) a chance to refuse to pay for the proposed test or treatment ahead of time. In real life, many tests and treatments are refused just to see if the doctor will be persistent enough to appeal the decision. (If you ask enough times, they figure that you’re serious and that the patient must really, really need it.)
In Mary’s particular case, Dr. Svendsen submitted her written request for the test along with copies of all the necessary medical records. Eventually the MRI study was approved by TRICARE’s pre-authorization personnel. Thank goodness the MRI was normal. All well that ends well, right?
Not if you’re on America’s road to Hellth.
A few weeks later, Dr. Svendsen received a call from her local hospital informing her that TRICARE was refusing to pay for Mary’s pre-authorized MRI. This was a serious problem. The hospital won’t keep taking Dr. Svendsen’s patients if it doesn’t get paid for them, and an MRI denial means hundreds of dollars of lost income – even at TRICARE’s low payment rates.
Taking time away from her patients, Dr. Svendsen called TRICARE to find out why payment had been denied, despite her having gone to all the trouble of obtaining prior authorization. After talking to several different individuals, she was finally referred to a supervisor who explained that: “Just because we authorize a treatment doesn’t mean that we’re going to pay for it.”
“Then why do I have to go to all of the trouble to obtain a pre-authorization?” asked Dr. Svendsen. The TRICARE representative couldn’t answer that question, but made it clear that there was no point in appealing. And that was that.
Amidst the rush to have our government “reform” healthcare, there is great irony in this tale. Our leaders have made it clear that honesty will be the order of the day for doctors, hospitals and other healthcare providers. “Waste, fraud and abuse” will be hunted down and eradicated like polio. In a speech before a rare joint session of Congress, President Obama pledged that, “the only thing [the President’s health proposals] would eliminate is the hundreds of billions of dollars in waste and fraud.” Two months later White House budget chief Peter Orzag took the gloves off when declaring that, “we can no longer tolerate these errors, mistakes and misdeeds…”
Of course, from Dr. Svendsen and her hospital’s perspective TRICARE’s own business practices seem to constitute fraud. The dictionary defines this as an “intentional perversion of truth in order to induce another to part with something of value.” Every healthcare provider in the U.S. believes that receiving authorization from an insurer is a promise to pay for the procedure, medication or test requested. Otherwise why, as Dr. Svendsen asked, are pre-authorizations required at all? If the government’s own insurers promise to pay but don’t, how is that different from stealing? Stealing, one might add, by the same folks who are making a huge commotion about stamping out “waste, fraud and abuse”.
The classic movie Casablanca has many great characters. One of them is a pickpocket known only as “The Dark European”. While lifting his victim’s wallets he warns them be wary of thieves, for there are “vultures, vultures everywhere.”
Clearly our federal government needs to hire this guy as their lead healthcare administrator.